With wages, only a handful getting richer

A while ago, I heard an economist say something startling about wages in America.

In the last decade, he said, the only people who saw real wage growth were doctors, lawyers and MBAs. He was exaggerating, but not by much.

Over the past 30 years, a wage gap has taken root in Florida,driving up the incomes of the best-paid workers, while leaving those near the bottom scrambling for scraps. The numbers are much worse than I'd imagined.

Here's what they show: Since 1979, Florida's top earners, those in the top 10 percent, have seen wages grow by almost 34 percent. That's three times the 11 percent growth experienced by the bottom 20 percent.

As for the lowest-paid workers (those in the bottom 10 percent), well they saw no increase at all. Their wages, adjusted for inflation, actually declined.

I've met lots of workers — from both ends of the pay scale — since I began writing about the economy and labor issues in 2009. Beginning today, I'll be telling their stories in a weekly column. I expect a pretty-wide ranging affair, touching on everything from business to politics to the labor market. Yes, there will be numbers and statistics, but only when they drive home a point about people.

Which segues nicely back to an eye-popping (and thoroughly depressing) graphic created by The Economic Policy Institute. It shows wages of Florida's biggest earners climbing steadily while the lines representing low-paid workers remain as flat as the West Orange Trail.

It's striking if only for the mathematics.

Low-paid workers should have an easy time posting big percentage gains because they're starting from a much smaller base. But the funk of stagnation is too heavy to shake.

It hasn't always been this way.

Between 1945 and the early 1970s, wage growth was distributed more evenly across income groups. During that time, the median family income grew by 3.2 percent each year, according to the Federal Reserve. But in the '70s, wages began to stagnate. Between 1973 and 1996, median family income grew, on average, just 0.3 percent each year.

Little has changed since then – even among well-educated workers.

Since 2000, the only groups that experienced real income growth were MBAs, PhDs, lawyers and doctors – the workers singled out by Dartmouth College economist Matthew Slaughter. Everyone else, even people with master's degrees, lost ground.

"By some measures," Slaughter has written, "inequality in the United States is greater today than at any time since the 1920s."

It's not an especially effective way to run an economy.

Consumer spending accounts for about two-thirds of all economic activity in the U.S. If those consumers are treading water – or drowning – they won't have the cash or confidence to keep the economic engine humming.

It's particularly worrisome in Central Floridabecause the region is fat with low-paying jobs. About 345,000 people – 33 percent of the total labor force — work in retail or leisure and hospitality, areas which have seen little or no real wage growth. Stagnant wages help explain why so many people still feel so anxious about the economy. The big macro numbers may be improving, but people don't see it in their paychecks.

Orlando resident Lakeisha Ford, 34, spent more than two years working for an apartment management company before leaving late last year. She started at $9 an hour and, despite a promotion, never got a raise or even a performance review. It was frustrating, but she was reluctant to quit given the weak labor market.

"I'm a single mom," she said, "so I really had to have a job."

She's since found work at a mail-order prescription company making $11 an hour. She thinks she'll be up for a raise in the spring. "I really like this place," she said.

Andrae Bailey runs the Community Food & Outreach Center in downtown Orlando. Bailey said many of his organization's clients have worked for years, but their pay has barely budged.

"The gap between what it takes to live and what you earn continues to grow," said Bailey. "And we don't know what the solution is."

Economists cite a litany of reasons for sluggish wage growth, including outsourcing, the decline of unions, technological advances and global trade. But there's also been a cultural shift within many industries that makes it acceptable to hold down front-line labor costs while boosting top-end pay.

In the mid-1960s, for example, CEOs made about 20 times as much as the average worker. Today, EPI estimates, they make about 230 times as much.

President Obama touched on wage stagnation in his inaugural address, warning that, "Our nation cannot succeed when a shrinking few do very well and a growing many barely make it. We believe that America's prosperity must rest upon the broad shoulders of a rising middle class."